I am often asked why the SBA requires personal guarantors for 504 loans. There are several reasons for this. First understand that personal guarantees are required on all SBA loans. A personal guarantee is not a sign that your business is unhealthy or risky. Even businesses with a solid performance history and an excellent credit rating will be required to sign personal guarantees.
When you think of government agencies, such as the SBA, you probably imagine mountains of paperwork. In fact, many lenders actively avoid promoting 504 loans from fear of endless forms. You should know that the SBA has taken great strides in reducing the number of forms needed to apply for a loan.
Many people dream of the day when they can purchase a vacation home. Owning additional properties often represents financial success and social prosperity. However, additional business properties can create obstacles to actual business growth. Community Business Finance helped a tortilla manufacturer consolidate their factories and reduce their monthly expenses with our 504 Loan Program.
Justice Oliver Wendell Holmes, Jr. reportedly said, "I like to pay taxes. With them I buy civilization." Civilization is not the only benefit of paying taxes. The most successful businesses in America are the ones that accurately report their income and faithfully pay their taxes. In fact, accuracy is crucial to the success of a business. It is also crucial when securing a business loan, such as Community Business Finance's 504 Loan Program.